Generating passive rental income is the goal for any smart real estate investor, but it’s not always easy.
There are things about a property every investor should know before they close a deal, but sometimes, the unexpected happens, and landlords lose.
That said, there are a number of strategies investors should be mindful of that can help them secure a maximum return and avoid circumstances that can lead to financial setbacks.
A property management expert, Mike Hills has been house hacking for almost 20 years, and knows what investors need to do to stay on top. He owns a portfolio worth more than $8 million, built off the strategy in which owners of multifamily rental properties live in one of their units while collecting rent from the others.
Here are the three things Hills has invested in to boost his passive income from that portfolio.
The Federal Reserve recently cut the benchmark interest rate by a half-point, the largest since 2008. The unexpected rate cut is substantial and could be a signal of economic weakness. Many investors are starting to feel concerned and uncertain about the future.
While investors may find this rate cut to be alarming, they should view it as a prime time to purchase their next property. Considering lower rates along with inflation, investors looking beyond the stock market might find viable opportunities in real estate investment. Lower rates lead to reduced interest payments, maximizing property acquisition for potential buyers.
As our country grapples with COVID-19 we are committed to providing you as much information and insight as possible. As owners and managers of all asset-classes of real estate, we are working diligently to understand our current environment. We see this is an important time to come together and work toward the best possible outcomes for our owners, residents, investors, and team members.
This webinar will be primarily a Q&A session with our co-founder, Ryan Boykin and CEO, Tony Julianelle. After making some initial opening statements, Ryan will take questions from attendees.
Topic: Atlas Real Estate Market Update and Q&A Session
Budget Dumpster’s 8 Essential House Flipping Tips for Beginners features pearls of wisdom from experienced investors such as Atlas VP of Investment Brokerage, Mike Hills. Hills says,”
To really get a feel for what a neighborhood is like, talk to people that live there and visit the area yourself at different days and times. For example, go to the neighborhood at 11 p.m. on a Friday night, on a Tuesday around 5 p.m. and on a Thursday at 7 a.m. to get the full picture. See what’s going on, what you hear, what traffic noise is like and, most importantly, if you feel safe.
Ryan Boykin shares his perspective on single-family real estate investment opportunities in the latest from the Colorado Real Estate Journal.
Single-family real estate is emerging as an exciting asset class, presenting savvy investors with viable investment opportunities.
Current low-interest rates, combined with steady job growth, advances in technology and dissatisfaction with other investment forms, have made single-family real estate investments a lucrative and sustainable source of passive income.
A 2018 survey conducted by Millennium Trust Co. found that investors are favoring alternative investment options, including real estate, with 73 percent of survey participants favoring single-family rentals. Over one-third of rental properties in the United States are single-family rental homes, and this number is projected to increase as more potential stakeholders begin to seize this high-yield, turnkey investment opportunity.
I continued my career in real estate, now as an investment real agent with Atlas Real Estate Group (Atlas). At this point, I was financially stable, but I did not have a surplus of extra income. This changed when I sat in on a presentation about building wealth with Mike Hills, who is now the VP of investment brokerage at Atlas.
In this presentation, Mike asked the Atlas brokers if anyone was interested in assisting him communicate investing information to potential clients. Mike is trained as a national speaker. I had experience with event planning in both residential and commercial real estate. I thought that I could make an investing class fun, and at the same time, give back to others.
The Real Estate Investment Hour (REIH) team circa 2018.
After forming Mike’s team, along with Adam Unger, I created real estate events on Meetup, made flyers and invited local residents to these events where Mike would speak. I found brokering real estate to be a wonderful way to have freedom and time in my life. In other words, I could have a career while still being able to be a full-time single parent. I could show up for my kids. Along with Mike, I was able to speak to investors at the meetings about my own story.
As I grew our client base, our team was able to reach more and more people. Some of my commercial clients began to buy residential rentals. There are so many stories of the people we have helped, and lives that we have changed by setting families up with a stream of passive income. Mike and I brokered the investment deals together, and in 2018, we did over 30 million in gross transactions in one year.
The Bigger And Better Move
When my friends Jen and Aaron decided to move, our Green Valley house no longer felt like home. With some of the home equity from the house, I decided to buy a house in Littleton, a lovely area where my family could be close to the mountains and spend time outside. Still, I kept the Green Valley Ranch house as a rental and found myself the proud owner of not one, but three houses.
Just as things were looking up, Maya’s health faltered again. She is now 17, and her antibiotics stopped working, a side effect that her doctors warned me about after years of chronic infection. With a sinking feeling in my stomach once again, I remembered an article my mom had sent me years ago about a medicine made in far-off Tbilisi, Georgia, that works against antibiotic-resistant infection. It is called a phage, and it lives in nature and keeps the bacteria from overtaking the soil.
Maya and I in London for her Make-A-Wish trip.
It took time and an incredible amount of leg work, and then I was able to find a doctor in Oregon that had a clinical trial for the international medicine. It is really hard to wait for doctors to call you back when your child is dying. Without a flexible career in real estate, or the passive income from my rentals, it would not have been possible to take a month off to travel to get her the care she needed.
With the right treatment, Maya’s sinuses and lung infections began to abate. Two years later, the doctors now say that she has healthier lungs than a teenager without cystic fibrosis. She is my miracle child. Without the flexibility and financial stability of a career in real estate, Maya’s miracle would not have been possible. Maya will continue to get infections because of her disease, however, we are hopeful for the future.
Overcoming Adversity One Leap At A Time
Throughout this journey, I have learned that in life, you have to have faith in a different future and then you have to leap for it. Always live with intention. I chose to leave my ex to have a peaceful life. I chose to move to Denver to have the kind of support I needed in my life. I chose to learn how to be financially secure with the right team, and then I chose to move to Littleton. I sought out an alternative medicine intervention for my daughter and found one across the world that worked.
I do not believe I am a victim with no choices. I research like crazy, surround myself with the right team, and then I leap. I get really scared sometimes, yet I leap anyway. I move past my own resistance.
A beautiful home in Denver that I had the pleasure of selling.
Today, I want use my hardship as a platform to help others. Knowing the way out of darkness, especially as a single mother, is a beautiful journey worth sharing. It’s important to remind myself, and others, to never let your circumstances dictate your future.
And I’m not done. Last year Mike and I flipped a house. I was able to use the money from that sale to buy a house in an even greater area for my children. I now own four houses. The best part is the other three houses pay for me to live in this one.
Here is the thing: The first two houses I made money on accidentally because of market growth. I didn’t even really set out to be a landlord. I learned the system on how to invest with intention from Atlas Real Estate Group and bought my third and fourth houses on purpose. Even though I have been hurt in the past, I go towards the future with faith and it allows me to move. Above all else, I get up and keep going. I continue to grow at Atlas, and I am now able to teach what I have learned from Atlas with others.
Written By Jennifer Reinhardt, associate broker at Atlas Real Estate Group
Philippians 4:12-13 I know how to get along with humble means, and I also know how to live in prosperity; in any and every circumstance I have learned the secret of being filled and going hungry, both of having abundance and suffering need. I can do all things through Him who strengthens me.
Maya holding new born Jack.
It all began with my little house in Centennial, CO. With my son Jack on the way, my family quickly began to outgrow our small home. In 2008 when the economy and housing market was low, I made the decision to keep our Centennial house as a rental instead of selling it for the down payment on the next house because the house was underwater in value and we’d lose money if I sold it.
Our family purchased a larger home, and soon after, my son Jack was born. Due to circumstances beyond my control, I was forced to leave Clarke. No one wants to be a single mom, especially with a newborn baby, but I decided to leave to protect my children.
Taking On Two Roles
In the divorce settlement, I traded the big house in exchange for full, physical custody and parental decision-making rights. Along with my newborn baby Jack, I was also caring for my older daughter Maya. She is a brave girl who is battling cystic fibrosis, a lung disease that makes her prone to lung infections and shortens her lifespan. The doctors predict her life expectancy is in the low 30s.
Still grieving over my failed relationship, I was staying with my parents. When my renters moved out of my little house, I moved back in. Living in my little Centennial house with two young children was very difficult. I didn’t sleep much and had no help caring for the baby or assistance with Maya’s cystic fibrosis breathing treatments.
Our bills piled up with the expense of daycare, and working as a real estate agent part time no longer paid my bills. My parents bought our groceries, we ate at church potlucks, and then my ex stopped paying for the other bigger house. Faced with all of the credit card debt from my ex, daycare fees for two children and two mortgages, I was quickly sinking.
With $4,000 left to my name, I found a home next door to my best friends. Jen and her husband Aaron lived in Denver, CO. Jen is Harvard-educated and trained as a dietitian, and she also runs medical schools. Her husband, Aaron, is also super smart and a writer. Their daughters are close in age to my kids. Living next door to my best friends, I had a lot of support.
With my credit problems holding me back from purchasing a home, I did a “rent-to-own” and locked in the Green Valley Ranch home at $155,000. I could not sell the little Centennial house because it was still underwater, so I became an accidental landlord once more. My family lives near the Centennial house and told me it was unwise to move. I was miserable and wanted a different life, and moved anyway. It’s important to note that to get off the path I was on, I had to trust my own decisions, which was hard with so much going wrong.
It Takes a Village
It truly takes a village! Me pictured with my best friend and neighbor, Jen and our children.
It was a scary time. I had already moved out of the little house and rented it out, consequently, I could not go back. The new neighborhood school was very low in ratings, so I chose to drive my daughter 30 minutes each way to the Centennial Elementary School. Maya eventually won a lottery system to get into a good Denver charter school.
I did not have all the steps planned out before I made a leap and moved. The new house was a fixer upper. I learned to sheet rock the walls with Jen, because the walls were damaged from cutting out mold. The backyard was covered with goat head thorns. My parents came around and turned the back yard into a corn field to get rid of the weeds; they were raised on a farm and this is normal for my family.
Things began to settle down, as the kids and I settled in next to our friends. The kids didn’t seem to mind that we didn’t have a lot of money, and the peace in our home made them happy. Jen and I took the fence down between our homes, and the children would play together in the back yard. Although it was not ideal, being single with children, Jen and her husband helped to fill in the gaps.
My daughter Maya and her Grandpa (my Dad) during her hospitalization for MRSA 5 years ago.
Just as things were starting to settle, Maya became very ill. Cystic fibrosis is like that. Maya looks completely normal, but lung infections can quickly cause her health to tank. Maya was hospitalized for a month with IV antibiotics, yet she still came home with the lung infection. The bacteria in cystic fibrosis lungs becomes resistant to antibiotics, and we were told by the doctors that this is the natural progression of cystic fibrosis. Eventually she would need new lungs or die.
But, would you believe that the doctors advocated for a high sugar diet, one with lots of calories, to help Maya gain weight? The side effect was more infections, and diabetes. Unsure of what to do, I turned to Jen who suggested an anti-inflammatory, low sugar diet. We cooked Maya’s meals together. Thankfully, Maya’s health quickly improved and over time, her diabetes subsided. Had I not made the leap to move, Maya would have remained sick.
Jen helped care for Maya, and I am forever grateful to her and her family. It is very difficult to be a sole caregiver for a chronically ill child, with a toddler son as well. Jen’s help was a poignant reminder that I had surrounded myself with a support system that allowed me to focus on, and have hope for, our future.
Empowerment Through A New Career
As Maya’s health stabilized, I started my new endeavor at a commercial real estate firm, The Space Agency. It was there where I met Matt Vos of Atlas Real Estate Group (Atlas), who purchased one of my residential listings. He invited me to come work for Atlas, which I took him up on. Atlas teaches people, including myself, how to transform their lives through passive income, using rental homes as the vehicle.
Time had passed and the economy began to slowly recover. I was finally financially back on my feet. I was able to purchase my Green Valley home next to Jen and continued to keep my Centennial house, which had also increased in value. These homes provided, and still do provide, financial stability for my family, something many single moms and many caregivers of disabled loved ones, are in search of. Time and money are essential to self-sufficiency and well-being. For the first time in a long time, I finally felt like I could make it on my own.
Atlas’ promotion of Mike Hills to Vice President of Investment Brokerage has been featured in the Movers and Shakers section of Mile High CRE.
Since 2013, Mike has been an integral member of the Atlas team. In his new role, Mike will lead and manage a replicable system to grow investment brokerage into new markets, beginning with Colorado Springs.
In March, Mike was named to the Top 100 Mile High Leaders list. Mike is also a frequent guest on talk radio programs, teaching listeners about real estate investment strategy and best practices.
“It is deeply gratifying to have helped so many clients achieve their financial goals through real estate,” said Mike Hills. “I am excited and ready to bring Atlas’ growing investment brokerage division to new people and markets, from Colorado Springs to other markets under consideration.”
Mike Hills’ recent promotion to vice president of Atlas’ investment brokerage was featured in Law 360’s Real Estate Moguls on the Move section.
Atlas Real Estate Group has promoted Mike Hills to vice president of investment brokerage. Hills joined Atlas Real Estate in 2013, and in his new role, he’ll look to expand the Denverbased firm’s investment brokerage reach into new markets, initially focusing on the Colorado Springs market. While at Atlas, Hills created the Real Estate Investment Hour, a monthly event that’s now part of Atlas Investment Brokerage.
Mike Hills’ promotion to vice president of investment brokerage was recently spotlighted in The Herd, the feature of Business Den that highlights the top new hires, departures and promotions.
Mike Hills has been promoted vice president of investment brokerage with Atlas Real Estate Group. He is a graduate of the University of Denver.
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